This critique has three purposes:
- Demonstrate that employer-financed health care is under assault.
- Show why self-funding may assist in the preservation of employer-financed health care.
- Suggest a number of changes to self-funding, which will make it more helpful and acceptable to employer-financed health care.
Employer-Financed Health Care Under Assault
In many ways, employer-financed health care is being challenged. The primary adversaries to the present system are as follows:
Large federal government advocates
Globalists and internationalists with their economic agendas
A small percentage of trial lawyers
A few insurers that would gain marketshare with supplemental-type benefit packages
Numerous consumer advocate groups who find fault with the present system.
Why Self-Funding Can Help Preserve the Present System
Self-funding gives the plan sponsor and all of the vendors the degrees of freedom to correct the numerous identified imperfections in the present system with the greatest speed and certainty of success. Of enormous importance are the following reasons why self-funding may help preserve the present system:
ERISA preemption advantage
Not being burdened with centuries of insurance case law
Division of labor (specialization) designed to maximize efficiency and harmony among the employer and vendors (community-based plan administration, e.g.)
Not being under the dominion of fifty state insurance departments.
Correcting Present Imperfections
This portion of the critique is in two parts:
- An enumeration and brief discussion of all of the features of our present system which the writer finds to be confusing, alarming, correctable, objectionable, questionable, etc. See attachment A.
- The presentation and detailed discussion of all of the ways by which self-funding may be modified so as to be the most effective funding vehicle for employer-sponsored plans. Self-funding modifications which are suggested are as follows (in no significant order):
Increased role of risk management
Suggested changes to stop-loss
Micro-managed plan document
New self-funded risks (LTD, death, supplemental coverage, e.g.)
Increased role of the MGU
Role of defined contribution plan
Requisite attitude changes
The writer finds in all matters and at all times the employer and vendors to be equally virtuous and properly following their own business plan. The writer is biased towards self-funding (akin to home-ownership), but quickly acknowledges that the fully insured option (as apartment renting) must be always an option (and very often the best option) for the employer.